Research On M&A Performance Evaluation Of M&A Based On The Perspective Of Balanced Score Card

The real estate industry has a character of high debt ratio and turnover period.For years,China has implemented supply-side reform and issued the policy of purchase restriction and loan restriction to strictly supervise deals.The land bidding,auction and listing policy makes a high cost of land acquisition.The difficulties in financing,selling houses and acquiring land mentioned above make some firms operate difficultly and promote the M&A of this industry.How to carry out these reorganization and integration,what is the financial result of M&A,and is there any lessons learned?In this regard,this paper selects Sunac China,a typical real estate enterprise that has launched several M&A events recently,as the research object,and takes sunac China’s acquisition of Wanda Cultural tourism project,which is huge and far-reaching,as the case study for in-depth study,and examines finanncial effects of M&A in its industry.Three methods of traditional M&A performance evalution include financial index method,event study method and EVA.Their common character is that they only evaluate the performance from the financial dimension,and analyze M&A performance single and one-sided.Based on the perspective of BSC,the article designs the assessment system from three M&A synergistic effects to evaluate M&A performance more objectively and comprehensively.In the research process,this paper firstly selects representative indicators of each dimension according to the contents of the three dimensions of synergistic effect of M&A.Secondly,the index weights of each dimension were calculated by the entropy method selecting the top 10 enterprises in operating revenue in 2020 including Sunac China as the sample companies.The original index values were forward and normalized to calculate the contribution degree P_ijof Sunac and every index weight W_j.Finally,the contribution degree of Sunac indicator is weighted to get the consequences of three synergy dimensions and the comprehensive consequence,and observe if the score rise or decline after M&A to analyze whether the synergy effect is realized.This study concluded that Sunac achieved significant synergistic effect after the completion of merger and acquisition from the three dimensions.There is no synergistic effect in the financial synergy dimension,because sunac adopts the payment method of cash and bank loan for merger and acquisition consideration,which increases the financial risk of Sunac.Significant synergistic effect is obtained from management and operation synergy,and resource allocation efficiency and operation performance are improved after the completion of M&A.As traditional real estate enterprise,the acquisition of Wanda Cultural Travel Project implements the"real estate+"mode diversification strategy layout,opened the asset-light transformation.However,considering that the introduction of the"three red lines"in 2020 will chock off financing in this industry,what’s more,it is more difficult to collect payment from sales,it is suggested that real estate enterprises should carefully choose acquisition objects,accelerate cash recovery,and transform to property services,cultural travel,finance and other asset-light fields.